Insights
Joint Venture Agreements a Must!
Wanting to buy a property with someone else? Looking for a more affordable way to purchase property and thinking about forming a partnership with someone else? You might be convinced that you know the person you want to buy Real Estate with, but do you really?
Purchasing any property is an exciting time particularly when you have a team to share it with, however as with any business project, if things take a turn for the worst or the relationship goes sour then everything you have planned for should be in writing. This prevents any uncertainty about what will happen should certain events happen and what response that will trigger, removing any doubt or perceived lack of communication.
Purchasing a property as ‘tenants in common’ allows for each party to own an agreed share of the property and it is possible to then sell this share to someone else or to leave their share to others in their will.
Don't leave decisions to chance
Making a formal document at the start can help the partnership to agree on what would happen should circumstances change for either party.
These changes could include
- One partner wants to sell and the other does not
- What if the other party cannot afford to buy the other out of the property?
- Will divorce of one partner affect the other?
- Death of either partner or both (have your wishes known)
.
- Agreement what to do if the property does not perform as expected
- Agreement what to do if the property does not sell within a particular time frame
- How will you agree on the market value of the property?
- Can either party live in the property?
- What if one party loses their job and cannot pay the mortgage?
- Who pays for repairs, rates and outgoings?
- How will rental funds be distributed?
The risk of not having a formal document can mean that a court agreement may need to be put in place if a forced sale is required. Your legal professional can help you to make sure everyone’s expectations are clear from the beginning.
This is not legal advice, you should obtain legal advice in relation to your own specific circumstances.
